Botswana: Discovery of the World’s Largest Diamond at Karowe Mine
(Ecofin Agency) – Since the discovery of the Cullinan diamond in 1905, it has held the record as the largest diamond ever found. However, recent years have seen Botswana emerge as a hub for discovering some of the world’s biggest diamonds, especially at the Karowe mine, operated by Canada’s Lucara Diamond Corporation.
This week, Lucara announced the discovery of a 2,492-carat diamond at its Karowe mine in Botswana, now the second-largest diamond ever unearthed. The news, released on August 21, was anticipated by those familiar with the diamond industry, given the Karowe mine’s reputation for producing exceptional finds.
Botswana’s President, Mokgweetsi Masisi, officially unveiled the diamond, marking it as the latest of five diamonds over 1,000 carats discovered at Karowe since 2015. Among these remarkable finds was the 1,109-carat Lesedi la Rona in 2015, the fifth-largest diamond globally and a type IIa diamond, prized for its clarity and rarity.
In 2019, Karowe made headlines again with the discovery of the 1,758-carat Sewelô diamond, which means “rare find” in the local language. This diamond held the title of the second-largest ever found until the recent discovery of the 2,492-carat stone.
Two more diamonds exceeding 1,000 carats were found at the Karowe mine in 2021 and 2023, weighing 1,174 and 1,080 carats, respectively. Other significant discoveries include a 998-carat diamond in 2020 and the 813-carat Constellation diamond in 2015.
The Secret Behind Karowe’s Success
Beyond the natural potential of the Karowe mine, Lucara attributes its success to the Mega Diamond Recovery technology, an X-ray detection system installed at the mine in 2017. This technology helps to identify and protect large diamonds, minimizing the risk of breakage during extraction.
Lucara has established itself as a significant player in Botswana’s diamond industry, even though it contributes less than 1% of the country’s total diamond production. In 2023, the Karowe mine produced 395,134 carats, a small portion of Botswana’s overall diamond output. Lucara owns 100% of the Karowe mine but pays a 10% royalty to the Botswana government and is subject to a variable income tax rate between 22% and 55%.
Botswana: A Leading Diamond Producer
As the premier diamond-producing nation globally by value and second only by volume, Botswana stands as a beacon in the diamond industry, a remarkable achievement that can be credited to its strategic alliance with the renowned De Beers Group. This pivotal partnership has propelled Botswana to the forefront, enabling it to produce an impressive 24.7 million carats in 2023, a staggering 98% of the country’s total diamond yield. Such figures are not mere statistics but a testament to Botswana’s unwavering commitment to excellence and quality in diamond production, which has captivated both markets and connoisseurs worldwide.
The role of De Beers in elevating Botswana’s status cannot be understated. This collaboration has been instrumental in establishing Botswana as a prominent source of exceptionally large diamonds, underscoring the nation’s geological wealth. A shining example of this is the remarkable 1,098-carat diamond unearthed in 2021 from the Jwaneng mine, a crown jewel of the Debswana joint venture—a synergistic partnership between De Beers and the Botswana government. Notably, Botswana’s prolific diamond mines have produced seven out of the ten largest diamonds ever recorded, a feat that underscores the nation’s prominence and allure within the gemstone market.
Yet, in this illustrious domain, the grandeur of South Africa’s historic achievement still looms large. The discovery of the Cullinan diamond, an astounding 3,106-carat gem unearthed in 1905, remains the zenith of diamond finds. This colossal stone was meticulously cleaved into several exquisite pieces, some of which now grace the British Crown Jewels, epitomizing a legacy of splendor and regal elegance. Botswana’s rise to diamond supremacy, however, reflects a contemporary dynamism and a relentless pursuit of excellence, marking it not just as a key player but as a leader in the glittering world of diamonds.
Botswana’s Economic Gains from Diamonds
In 2023, Botswana earned $3.5 billion from diamond exports. Diamonds account for 80% of the country’s exports and roughly 30% of its GDP, also contributing about a third of government tax revenues.
De Beers, Botswana’s primary diamond producer, is a significant revenue source in the diamond sector. In 2023, the Anglo-American subsidiary renewed its partnership with the government for another decade, on terms more favorable to Botswana. Under the new agreement, Botswana’s national diamond trader, Okavango Diamond Company (ODC), will receive 30% of Debswana’s production, up from 25%, with this share increasing to 50% over the next ten years.
The Need for Economic Diversification
While diamonds play a critical role in Botswana’s economy, their market volatility poses challenges. Since the COVID-19 pandemic and the subsequent crisis in the diamond market, Botswana has been working to diversify its economy, particularly within the mining sector.
De Beers has pledged to establish an economic development fund with an initial investment of 1 billion pulas (around $75 million), potentially increasing to 10 billion pulas over the next decade. Additionally, the development of a copper industry is underway, marked by China’s MMG acquiring a copper mine for $1.9 billion last year.
Despite these diversification efforts, Botswana’s economy relies heavily on diamond mining. The African Development Bank (AfDB) forecasts economic growth to increase from 2.7% in 2023 to 4.0% in 2024, driven by a rebound in diamond sales. Last year, the sector faced a steep decline in demand and prices due to a sluggish global economy.
In its country report published in July 2024, the AfDB stressed that “for Botswana to succeed in diversifying away from diamonds, it must reduce government involvement in economic activities to allow the private sector to grow.”
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